The operator welcomes participants to the Regeneron Pharmaceuticals Second Quarter 2024 Earnings Conference Call and introduces the speakers. The call will be recorded and an archive will be available later. The speakers include the CEO, President, and other executives who will discuss the company's financial results and future plans. The call will end with a question-and-answer session. The speakers may make forward-looking statements about the company, which are subject to risks and uncertainties.

In the second quarter of 2024, Regeneron reported strong performance with double-digit revenue and earnings growth. This was driven by sales of EYLEA HD in the United States and higher Sanofi collaboration revenues, particularly from DUPIXENT and LIBTAYO. The company also made significant advances in their pipeline. Further updates on the pipeline and commercial performance will be provided by George and Marion, respectively. Chris will then discuss the financial results and updates to the full year guidance.

EYLEA HD has had a successful launch in the US market, with $304 million in sales in its third quarter and a 2.3% growth compared to the previous year. The company is also working on launching a pre-filled syringe version of EYLEA HD by early 2025. DUPIXENT global revenues have also seen strong growth, with a 29% increase to $3.56 billion. The drug was recently approved by the European Commission for treating COPD in patients with raised blood eosinophils, and the company is awaiting FDA approval for the same indication in the US. This approval would address a high unmet need and could drive further growth for DUPIXENT.

The paragraph discusses the second quarter financial results for LIBTAYO, a cancer treatment, and the progress made in establishing an international commercial footprint. It also mentions a potential delay in the FDA approval for linvoseltamab, another cancer treatment, due to unresolved findings from a preapproval inspection. The company is also excited about upcoming readouts for other programs in their pipeline and is focused on delivering long-term value to shareholders. The call is then turned over to George to discuss DUPIXENT, another product in the company's portfolio.

The paragraph discusses data from a confirmatory trial for DUPIXENT in COPD, which showed a 34% reduction in exacerbations and improved lung function. This led to recent approval in Europe and submissions for approval in other countries. There are also upcoming data readouts for DUPIXENT in other indications, including chronic spontaneous urticaria and bullous pemphigoid. The company also expects to see initial data by the end of the year for a pilot study combining DUPIXENT with another drug to potentially eliminate severe food allergies. In addition, the company has a second therapeutic candidate for COPD, itepekimab, which is expected to have study readouts and regulatory submissions next year. In the field of oncology, the company will be presenting longer-term follow-up data for its LAG-3 antibody in combination with LIBTAYO at an upcoming conference.

The combination of fianlimab and LIBTAYO continues to show promising results in clinical trials, with potential to become a new standard of care in melanoma and other cancers. The company is also exploring the use of this combination in non-small cell lung cancer and other indications. Additionally, the company is testing costimulatory bispecific antibodies in various studies, with promising results in microsatellite stable colorectal cancer. The company is also exploring the use of PSMA by CD28 bispecific in late-line prostate cancer with good results.

The company is combining two bispecific treatments for PSMA and testing them in other cancers. They also presented updated data for their BCMA by CD3 bispecific in late-line myeloma, showing promising results. They are also conducting studies for this treatment in earlier stages of myeloma and precursor conditions. In their nononcology hematology pipeline, they are expecting proof-of-concept results for their two Factor XI antibodies in the prevention of venous thromboembolism after knee replacement surgery, with interim results expected by the end of this year.

The company has begun a proof-of-concept study to evaluate the effectiveness of two antibodies in preventing thrombosis in patients with peripherally inserted catheters. They are also working on a solution to address the potential muscle loss caused by GLP and GIP receptor agonists used for weight loss. The company has completed the first part of a Phase II study and is enrolling participants for the second part. They also presented updated data on their gene therapy program for genetic hearing loss at a recent conference. The first child treated with the therapy showed significant improvement in hearing after 24 weeks.

The company has made progress in their otoferlin gene therapy study, with plans to bring additional gene therapy programs to the clinic. They are also collaborating with Intellia and Alnylam on CRISPR and siRNA therapies for various diseases, including transthyretin amyloidosis, hemophilia B, and ALS. They are also working on a C5 program for paroxysmal nocturnal hemoglobinuria and geographic atrophy. The company expects to release pivotal and proof-of-concept data in the next 12-18 months.

In the second quarter, Regeneron's early research efforts have been successful with multiple new programs potentially advancing to the clinic. Marion McCourt, the company's spokesperson, reports that the company's commercial results in the second quarter demonstrate their strong and diverse product portfolio with continued growth opportunities. EYLEA HD and EYLEA in the US both saw growth in net sales, with EYLEA HD being the fastest growing medicine in its category. Physicians are increasingly switching to EYLEA HD from other treatments and early real-world data shows extended treatment intervals. The number of physician offices ordering EYLEA HD has also increased significantly.

The paragraph discusses the success of EYLEA HD and EYLEA in the second quarter, with prescribers showing confidence in the drugs' clinical profile and reimbursement. The upcoming launch of the EYLEA HD pre-filled syringe is also mentioned. The focus then shifts to DUPIXENT, which saw 29% growth and is approaching 1 million patients worldwide. The drug's success is attributed to its effectiveness in various indications and the efforts of the commercial team to raise awareness and support prescribing. Recent launches in new indications have also exceeded expectations. The European Commission has also approved DUPIXENT for use in COPD patients.

The company anticipates FDA approval for DUPIXENT to treat COPD and expects it to benefit around 300,000 patients in the US. They also expect FDA approval for DUPIXENT to treat chronic rhinosinusitis and nasal polyps in adolescents next month. Positive results from ongoing trials for DUPIXENT in other conditions could potentially help more patients. The company also saw strong sales for LIBTAYO in the second quarter, with market share gains in skin and lung cancers. They are also anticipating FDA and EU decisions for linvoseltamab to treat late-stage myeloma.

Regeneron's commercial team is successfully expanding access to their medicines globally, with potential for future growth in both approved indications and their pipeline. In the second quarter, the company saw strong double-digit growth in both revenues and net income, driven by the ongoing launch of EYLEA HD in the US, higher collaboration revenue from Sanofi, and continued global sales of LIBTAYO. Revenues from the Sanofi collaboration grew by 32%, primarily due to the growth of DUPIXENT. The company also expects to fully reimburse Sanofi for development costs by the end of 2026. Additionally, EYLEA and EYLEA 8 mg saw an 8% increase in ex-US net sales in the second quarter.

In the second quarter, Regeneron's total collaboration revenue was $375 million, with most of it coming from their share of net profits outside the US. They also saw a 10% increase in R&D expenses and a 19% increase in SG&A expenses, primarily due to investments in their pipeline and the launch of a new product. Gross margin and net product sales were at 89%, but this was affected by start-up costs for a new manufacturing facility. Regeneron had strong cash flow and ended the quarter with a healthy balance sheet. They have updated their full year financial guidance, with gross margin now expected to be approximately 89%. Overall, Regeneron is in a good position for future growth.

The speaker concludes their prepared remarks and opens the call for Q&A. They will answer one question from each caller. The first question is from Tyler Van Buren of TD Cowen regarding the EYLEA franchise. The speaker is encouraged by the franchise's overall growth and maintaining a 45% market share. They believe EYLEA HD is in the launch stage and will allow for stable market share in the future. The speaker also mentions a 52% increase in net sales for EYLEA HD in the quarter.

The speaker discusses the use of EYLEA HD and its potential to become the new standard-of-care in the market. They also mention that the overall market growth for the category is currently tracking at single-digit growth in the midrange. The next question asks about the rationale for moving leptin to a Phase II trial in combination with other weight loss agents, and the speaker explains that this is based on results showing that leptin may be more effective in patients with lower leptin levels after significant weight loss.

The speaker discusses the potential role of leptin in driving weight loss in patients with low levels of the hormone. He mentions a partnership with Lilly to study the effects of tirzepatide on weight loss. The next question is about the positioning of linvo, and the speaker addresses concerns about a third-party facility and the potential role of a BCMA approach in the long term.

The biopharmaceutical industry has been facing issues with third-party filler type and manufacturing, which has caused delays in the FDA inspection process for some products. Regeneron's HD EYLEA was affected by this last year, and although the observations have been remediated, a reinspection is required, which may not be completed in time for the PDUFA date. This is a widespread issue and the FDA is planning a public hearing on it. However, Regeneron is working with the FDA to resolve the issue as quickly as possible. Despite these challenges, the efficacy data for their bispecific treatment remains strong, with high complete response rates and best-in-class PFS and overall survival numbers. The company also believes their safety and dosing schedule are best-in-class.

The company is excited about the potential approval of their drug linvoseltamab and has a highly experienced team ready for launch. They are not limiting themselves to just the last line of therapy and are aggressively moving into earlier lines. They will keep investors updated on their progress. The company is also receiving interest in their Factor XI program and will be focusing on differences between their two antibodies and key aspects of upcoming readouts to ensure they are on the right track.

The speaker discusses the progress of EYLEA and mentions that the company has received market feedback that access barriers still exist, particularly among Medicare Advantage plans, despite the permanent J-code change. This is in contrast to the inflection seen with another drug, VABYSMO, when it received its permanent J-code, which was affected by variables such as discounting. The speaker also mentions that the company hopes to announce the direction they will take with their two new antibodies by the end of the year.

Marion McCourt, speaking on behalf of the company, addresses the dynamic surrounding access to EYLEA HD after the permanent J-code is implemented. She mentions that there has been significant progress in opening access for Medicare patients, and that the drug has strong payer coverage, with reimbursement in place for 80% of the market. In response to a question about the myostatin program, George Yancopoulos explains that their focus is on creating individual reagents to best dissect the pathway and determine the most important players. He also mentions that other companies are using an antibody that blocks multiple pathways, which could lead to potential side effects and adverse effects.

The researchers are studying two specific pathways in order to determine which one is the most effective and safe for weight loss. They are also developing single molecule solutions that can target multiple pathways simultaneously. However, they are cautious about rapid weight loss as it can lead to muscle loss, and their goal is to prevent this while still promoting fat loss. By blocking certain pathways, they hope to achieve both goals of preventing muscle loss and increasing fat loss.

The company has conducted preclinical studies on nonhuman primates to determine if their weight loss program can be effective in humans. They are the only ones precisely interrogating the pathways and believe they can optimize fat loss while maintaining muscle. The company is also working on a treatment for food allergies using a combination of their drug DUPIXENT and a safe way to eliminate the cells causing allergic responses. They are starting with the most severe food allergy patients who have high unmet needs and risks.

The more effective and safe the treatment for allergies is, the broader the population it can be used for. If the treatment can eliminate all allergy-inducing cells and prevent their rebound, it can potentially be used for milder allergy patients as well. The initial studies are being conducted on the most severe food-allergic patients, but if successful, the treatment could be expanded to milder cases. The potential impact of this treatment is significant, as it could potentially reduce the number of emergency room visits for food allergies. The safety profile of the drug Dupi is also reassuring and makes scientific sense for this treatment approach.

In response to a question about the DOJ investigation into marketing practices, Regeneron's CEO states that there have been no changes in their practices and they intend to fight the lawsuit. Another question asks about potential acquisitions in the field of eye disease, to which the CEO says they are constantly exploring opportunities.

Regeneron is evaluating two classes of antibodies that target the Factor XI pathway in different ways. One is expected to be more effective at preventing clot formation, but may have more serious side effects. The other may be less effective, but much safer. Once the profiles of these antibodies are understood, Regeneron will decide which direction to take with their development.

George Yancopoulos and Leonard Schleifer discuss the potential of two distinct antibodies to treat clotting and thrombus formation in patients. They hope to better understand the efficacy and safety profiles of these antibodies by the end of the year and determine which indications they are most suitable for. The direct oral anticoagulant market is a $20 billion market and if they can provide similar efficacy with a better safety profile, there is a large market opportunity. They also mention that there are many settings where certain agents cannot be used due to safety concerns, creating additional opportunities for their antibodies. Carter Gould from Barclays asks a question about their progress in developing these antibodies.

The speaker congratulates the company on their recent quarter and asks about the launch of their pre-filled syringe. The company responds that they are anticipating a launch in early 2025 and are not concerned about competition. The next question asks about the pace of conversion for EYLEA HD for the second half of 2024, and the company responds that they are pleased with their progress so far. The final question is about EYLEA HD and the company does not provide a specific answer.

In the paragraph, Marion McCourt discusses the combination of patients who are switching to EYLEA HD and those who are new to treatment. She mentions that the majority of switch patients come from EYLEA and faricimab, with some also coming from avastin. She also notes that there has been a significant increase in utilization among treatment-naive patients. The company expects this trend to continue as EYLEA HD gains popularity in the market. The call concludes with the IR team offering to answer any remaining questions.

This summary was generated with AI and may contain some inaccuracies.